$DCTH: 8k OUT~~~
July 26, 2017
Delcath Letter to Stockholders
To My Fellow Stockholders:
I write to ask for your support for a reverse stock split as outlined in the accompanying Schedule 14A. This is the only item on the 14A and we ask you to vote FOR the Proposal.
To continue to fund our operations and support our clinical programs, we need the ability to issue common shares, both to service the amortization of our Convertible Note and to explore alternative equity financing. However, we are currently at the threshold of the Authorized Shares limit in our Certificate of Incorporation . Without a sufficient number of authorized shares, we are unable to access the $11.8 million of cash in the restricted account associated with the Convertible Notes issued last year, or to undertake any type of equity fund raise. The proposed reverse split of our common shares will reduce the shares outstanding and provide us with the flexibility to raise equity capital and support our important clinical trials and our commercial efforts in Europe.
In July, we issued two series of preferred stock (Series A Preferred Stock and Series B Preferred Stock) in transactions with holders of our Convertible Note. The Series A shares were issued to address a short-term valuation issue for common shares delivered to the Note holders to close an installment period. Through the Series A Preferred Shares placement, we were able to value the open installment shares such that the amount of debt remaining under the Convertible Note was reduced by $4.2 million. The Series B Preferred Shares, which are convertible to common shares at $0.153, allowed us to raise $2.0 million in unrestricted cash. This was critical to our ongoing operations because we are unable to access cash in the restricted accounts related to the Convertible Note. There is $13.7 million in debt remaining under the Convertible Note.
Effecting the reverse stock split will also allow Delcath to remain in compliance with NASDAQ exchange stock listing requirements, which provides liquidity and other important benefits to the Company and its investors . It is important to note that the floor price for the Convertible Note will adjust with the effected reverse stock split ratio to a minimum of $1.00 . We believe this should serve to support the stock price following a split and reduce future potential dilution related to the Convertible Note.
For these reasons, we need your support of our proposed reverse stock split in order for Delcath to move forward successfully, and on behalf of Delcath’s management team and Board of Directors, I am seeking your support by voting FOR the reverse stock split so we can continue to build Delcath into a leading interventional oncology company. All investors are encouraged to read our Definitive Schedule 14A in detail for full information regarding the proposed reverse stock split.
We appreciate your support and look forward to reporting on our continued clinical and commercial progress.
Sincerely,
LOGO
Jennifer K. Simpson, Ph.D., MSN, CRNP
President and Chief Executive Officer
July 26, 2017
Delcath Letter to Stockholders
To My Fellow Stockholders:
I write to ask for your support for a reverse stock split as outlined in the accompanying Schedule 14A. This is the only item on the 14A and we ask you to vote FOR the Proposal.
To continue to fund our operations and support our clinical programs, we need the ability to issue common shares, both to service the amortization of our Convertible Note and to explore alternative equity financing. However, we are currently at the threshold of the Authorized Shares limit in our Certificate of Incorporation . Without a sufficient number of authorized shares, we are unable to access the $11.8 million of cash in the restricted account associated with the Convertible Notes issued last year, or to undertake any type of equity fund raise. The proposed reverse split of our common shares will reduce the shares outstanding and provide us with the flexibility to raise equity capital and support our important clinical trials and our commercial efforts in Europe.
In July, we issued two series of preferred stock (Series A Preferred Stock and Series B Preferred Stock) in transactions with holders of our Convertible Note. The Series A shares were issued to address a short-term valuation issue for common shares delivered to the Note holders to close an installment period. Through the Series A Preferred Shares placement, we were able to value the open installment shares such that the amount of debt remaining under the Convertible Note was reduced by $4.2 million. The Series B Preferred Shares, which are convertible to common shares at $0.153, allowed us to raise $2.0 million in unrestricted cash. This was critical to our ongoing operations because we are unable to access cash in the restricted accounts related to the Convertible Note. There is $13.7 million in debt remaining under the Convertible Note.
Effecting the reverse stock split will also allow Delcath to remain in compliance with NASDAQ exchange stock listing requirements, which provides liquidity and other important benefits to the Company and its investors . It is important to note that the floor price for the Convertible Note will adjust with the effected reverse stock split ratio to a minimum of $1.00 . We believe this should serve to support the stock price following a split and reduce future potential dilution related to the Convertible Note.
For these reasons, we need your support of our proposed reverse stock split in order for Delcath to move forward successfully, and on behalf of Delcath’s management team and Board of Directors, I am seeking your support by voting FOR the reverse stock split so we can continue to build Delcath into a leading interventional oncology company. All investors are encouraged to read our Definitive Schedule 14A in detail for full information regarding the proposed reverse stock split.
We appreciate your support and look forward to reporting on our continued clinical and commercial progress.
Sincerely,
LOGO
Jennifer K. Simpson, Ph.D., MSN, CRNP
President and Chief Executive Officer
Sojourner here following God, obeying God, and cleaving to Him. The journey is onward.
